Founded in 2015, Qingdao Aibo Detection Technology Co., Ltd. is a medical products company based in Qingdao, China. Aibo’s initial goal was to make test reagents, but as the company grew, so did its business scope. Their output now includes the production and sale of medical devices, biological testing products, rubber and plastic products, and in vitro diagnostic reagents.
Aibo’s founder, Zhibo Yao, a professional medical testing engineer, realized the medical testing market was growing fast. “I felt I could make it big soon by making testing reagents. Unfortunately, there were many other people with the same idea,” he explains. But in its early days, Aibo and its 12 employees knew very little about protecting intellectual property (IP), and, as a result, the company had no IP to its name. After gradually realizing the critical role of innovation and IP in its future, Aibo shifted its focus towards research and development (R&D).
“After attending several courses provided by our local IP office, I knew patents could help my product stand out from those of competitors who were pushing similar products. Eventually, we generated two patents related to medical testing and filed for protection in 2017,” Explains Mr. Yao. Although it had committed to innovation and development, the company was low on funds, which hindered its advancement. “The R&D expenses almost bled us out,” especially considering we were only a company with 12 people and had a meager revenue,” Mr. Yao reveals.
Like many other SMEs, Aibo entered the market with a low credit rating and an asset-light presence. In 2019, cash problems severely impeded Aibo’s development, forcing the company to seek help from several different places. During this period, Mr. Yao came across information about the Qingdao Intellectual Property Public Service Center (then a preparatory organization for the WIPO Technology and Innovation Support Center (TISC) in China).
“After depleting my life savings, exhausted attempts to borrow money from friends and banks, and on the brink of closing shop, I heard that the local government’s IP service center could help SMEs to gain bank loans by pledging their patents as collateral,” Mr. Yao explains.
“Despite my initial doubts, I visited the center. They assessed my company and assisted me in all the paperwork for a loan application. To my surprise, in just one month, our two patents opened the door for us: the Bank of Qingdao granted us a loan of 3 million yuan (approx. USD 460,000).” This capital injection boosted its confidence in investing in innovation and development, leading to subsequent upgrades of its products.
Aibo made full use of the IP services and resources provided by their local TISC. The company sent staff to participate in training on patent information and made use of accessible patent databases to support its product development and patent portfolio planning.
“Being part of WIPO’s TISC system has allowed us to take full advantage of the center’s resources, which, in turn, has enabled us to make smarter decisions when using the patent system,” says Mr. Yao.
In 2019, Aibo filed 16 patent applications for its essential technologies and completed its preliminary patent portfolio planning. In brief, the TISC helped upgrade the IP skills of Aibo’s team and the quality of its products.
During the COVID-19 pandemic in 2020, Aibo came across other users of TISC services and through them, was able to expand its client base. “As a friend of the TISC network, we had the opportunity to meet other users of the system, particularly those closely related to our area of business. Medical supplies are currently needed everywhere, and we have been able to establish contact with several new clients through the network.” As a company now boasting a workforce of 70, Aibo has submitted 13 pending patent applications (all utility models) and has secured 31 granted patents (8 inventions, 23 utility models). And from 2017 to 2020, its operating income jumped from 1.5897 million yuan (approx. USD 244,000) to 13.62 million yuan (approx. USD 2,100,000). They are also in conversation with venture capitalists to grow faster in the dynamic medical supply market.
Once a startup with no IP to its name, Aibo has set up its IP management team and system. Within five years, the company has developed significantly, thanks to its understanding of IP, its commitment to innovation and the specialized services offered by its local TISC. In just five years, IP has become central to Aibo’s business model and is powering its development. “We are developing more patents, which will enable us to secure more loans, help us make better products, and market them more efficiently. There is no end to this virtuous cycle, which is most welcome,” says Mr. Yao.
As a technology-based SME, Aibo faced a problem that affects many startups: the difficulty to access cash. TISCs can support enterprises with IP training, IP financing, patent search and analysis, IP management and other innovation support services. With the help of these services, Aibo has continued to grow and build a greater understanding of the importance of IP importance. With this knowledge, Aibo improves its innovation capabilities and its ability to use its IP to support its business goals. By turning intangible assets into capital to obtain financial support, Aibo has achieved robust and sustained development. It has become a template for the innovative development of SMEs.